The credit score that you have can influence how you are seen by a lender, and there is no way around this fact which is why your credit score might just turn out to be the deciding factor when it comes to securing loans.
But the vital bit is that you must at least have a credit score; doesn’t matter if it is a bad one.
If you’re looking to secure a loan, but you have a bad credit score, this article will help direct you in the right direction, in the very least.
Let us look at the difference between having a bad credit score and having no credit whatsoever.
- Poor Credit: Having a history where you weren’t able to pay off your debts in time is what a poor credit score means.
- No Credit: A person is said to have no credit score when they have no prior experience with credit in the past.
It is vital to note that both the above can prevent you from getting a loan. But having no credit score is may work in your favor, although it still means you nothing is going in your support.
Here are some ways through which you secure a personal loan
1. Getting a loan with another person
When getting a loan with a cosigner, it is vital that they have a good credit score. You should also have a solid case as to why you are trying to get one. Doing so will help you increase your chances of getting a loan. Getting a cosigner with a good credit score will also lower the interest rates.
By assigning a fixed asset as collateral, you’ll be able to overcome a poor credit score and also reduce the risk from the lender’s side as well. This, of course, puts you at the risk of losing said assets, but it’ll still increase your chances of getting a loan.
3. Online lenders
Many make the mistake of only looking for loans through traditional banking and thereby, forget that there’s another option; online loans. There are plenty of lenders that compete with each other, which means they do not take credit history into consideration.
If all the above reasons do not sound appealing, you can always ask your friends or family if you can borrow money and if they understand your reason behind getting a loan, it is essential to make the ordeal as formal as possible, so as to not mix finance with personal business.